Devyani International gains on turnaround in Q2 performance

Devyani International advanced 3.34% to Rs 126.80 after the company reported a consolidated net profit of Rs 46.6 crore in Q2 FY22 as against a net loss of Rs 65.5 crore in Q2 FY21.

Revenue from operations in the second quarter increased by 124% to Rs 516.1 crore from Rs 229.9 crore reported in the same period last year.

"Healthy growth in revenue from operations, new stores additions and sustainable cost optimizations enabled the Company to turn profitable during the quarter, Devyani International said.

The company's India - KFC revenues were up 141% YoY and Pizza Hut revenues were up 111% YoY during the quarter. It recorded healthy growth in International business, which registered a revenue growth of 90% YoY to Rs 500 crore. Reported same-store sales growth (SSSG) of KFC and Pizza Hut was 72% and 76%, respectively.

EBITDA improved by 225% to Rs 123.3 crore in Q2 FY22 from Rs 38 crore in Q2 FY21. EBITDA margins was at 23.9% in Q2 FY22 as against 16.5% in Q2 FY21. Brand contribution increased by 346% to Rs 106.7 crore, with margins at 20.6% in the second quarter.

The company added 111 net new stores in H1 FY-2022, taking the total count at 803 store as on 30 September 2021 as against 692 stores as on 31 March 2021.

Ravi Jaipuria, Chairman, Devyani International, said, As on 30 September 2021, we operated 309 KFC stores, 351 Pizza Hut stores and 45 Costa Coffee stores in India. Our long-term focus is on consolidating our presence in key metro cities while tapping into smaller towns, enabling us to take our brands closer to our customers.

We have seen a great recovery on the demand side as the Covid 19 restrictions ease and the vaccination coverage improves. Leveraging this demand momentum across our markets, we expect to deliver a strong operational and financial performance. We are also cognizant of input cost inflation across various industries including QSR on both capex and opex side. We have built in multiple levers in our business to mitigate the impact of input inflation.

Devyani International (DIL) is the largest franchisee of Yum! Brands Inc. (which operates brands such as KFC, Pizza Hut and Taco Bell) in India and are among the largest operators of chain quick service restaurants (QSR) in India, on a non-exclusive basis, and operate 803 stores across more than 175 cities in India, Nigeria, and Nepal, as of September 30, 2021. In addition, DIL is a franchisee for the Costa Coffee brand and stores in India.

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